The latest AIA/Deltek Architecture Billings Index (ABI) for June has indicated a continuation of soft business conditions for firms, with a new recorded score of 46.4 (any score below 50 indicates a decline).
The number is slightly higher than May's score of 42.4, which represented a new post-pandemic low. The June data is augmented by other reported economic facts, including that the project pipeline is at its lowest point in three years (6.4 months on average).
"Architecture firms continue to face a period of headwinds in the construction sector, driven by elevated interest rates, high construction costs, and generally weak property values," AIA Chief Economist Kermit Baker commented on the June ABI. "This is the seventeenth consecutive month of a billings decrease, and yet, despite the softness, firms remain generally optimistic that conditions will start to improve once interest rates begin to ease."
Baker's assessment reflects the findings from our recent Archinect Business Survey, which primarily identified continued high interest rates, construction costs, inflation, post-pandemic trends, and a perfect storm of instability and uncertainty as the five big factors behind the architecture industry's economic slowdown.
You can read our new guide to understanding business conditions via the AIA's Architecture Billings Index here.
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